Senate Bill No. 1355

Introduced by Senator Wyland

February 21, 2014

An act to amend Section 1747.02 of the Civil Code, relating to credit cards.

LEGISLATIVE COUNSEL’S DIGEST

SB 1355, as introduced, Wyland. Credit cards: billing inquiries.

Existing state and federal law regulates the provision of credit and the use of credit cards. The Song-Beverly Credit Card Act of 1971 generally regulates credit card transactions and includes definitions of terms used in this law. Under existing law, a credit card issuer that fails to give a timely response to an inquiry of a cardholder concerning any debit or credit applicable to an obligation incurred through the use of a credit card is not entitled to specified interest, finance charges, service charges, or other charges thereon. Existing law defines “inquiry” as a writing mailed to the card issuer that is received by the card issuer no later than 60 days after the card issuer transmitted the first periodic statement with the alleged billing error, as specified.

This bill would increase the amount of time a credit cardholder is allowed to dispute a billing error, by increasing the current 60 days to one year.

Vote: majority. Appropriation: no. Fiscal committee: no. State-mandated local program: no.

The people of the State of California do enact as follows:

SECTION 1.  

Section 1747.02 of the Civil Code is amended
to read:

1747.02.  

As used in this title:

(a) “Credit card” means any card, plate, coupon book, or other
single credit device existing for the purpose of being used from
time to time upon presentation to obtain money, property, labor,
or services on credit. “Credit card” does not mean any of the
following:

(1) Any single credit device used to obtain telephone property,
labor, or services in any transaction under public utility tariffs.

(2) Any device that may be used to obtain credit pursuant to an
electronic fund transfer, but only if the credit is obtained under an
agreement between a consumer and a financial institution to extend
credit when the consumer’s asset account is overdrawn or to
maintain a specified minimum balance in the consumer’s asset
account.

(3) Any key or card key used at an automated dispensing outlet
to obtain or purchase petroleum products, as defined in subdivision
(c) of Section 13401 of the Business and Professions Code, that
will be used primarily for business rather than personal or family
purposes.

(b) “Accepted credit card” means any credit card that the
cardholder has requested or applied for and received or has signed,
or has used, or has authorized another person to use, for the purpose
of obtaining money, property, labor, or services on credit. Any
credit card issued in renewal of, or in substitution for, an accepted
credit card becomes an accepted credit card when received by the
cardholder, whether the credit card is issued by the same or a
successor card issuer.

(c) “Card issuer” means any person who issues a credit card or
the agent of that person for that purpose with respect to the credit
card.

(d) “Cardholder” means a natural person to whom a credit card
is issued for consumer credit purposes, or a natural person who
has agreed with the card issuer to pay consumer credit obligations
arising from the issuance of a credit card to another natural person.
For purposes of Sections 1747.05, 1747.10, and 1747.20, the term
includes any person to whom a credit card is issued for any
purpose, including business, commercial, or agricultural use, or a
person who has agreed with the card issuer to pay obligations
arising from the issuance of that credit card to another person.

(e) “Retailer” means every person other than a card issuer who
furnishes money, goods, services, or anything else of value upon
presentation of a credit card by a cardholder. “Retailer” shall not
mean the state, a county, city, city and county, or any other public
agency.

(f) “Unauthorized use” means the use of a credit card by a
person, other than the cardholder, (1) who does not have actual,
implied, or apparent authority for that use and (2) from which the
cardholder receives no benefit. “Unauthorized use” does not include
the use of a credit card by a person who has been given authority
by the cardholder to use the credit card. Any attempted termination
by the cardholder of the person’s authority is ineffective as against
the card issuer until the cardholder complies with the procedures
required by the card issuer to terminate that authority.
Notwithstanding the above, following the card issuer’s receipt of
oral or written notice from a cardholder indicating that it wishes
to terminate the authority of a previously authorized user of a credit
card, the card issuer shall follow its usual procedures for precluding
any further use of a credit card by an unauthorized person.

(g) An “inquiry” is a writing that is posted by mail to the address
of the card issuer to which payments are normally tendered, unless
another address is specifically indicated on the statement for that
purpose, then to that other address, and that is received by the card
issuer no later than begin delete 60 days end delete begin insert one year end insert after the card issuer
transmitted the first periodic statement that reflects the alleged
billing error, and that does all of the following:

(1) Sets forth sufficient information to enable the card issuer to
identify the cardholder and the account.

(2) Sufficiently identifies the billing error.

(3) Sets forth information providing the basis for the
cardholder’s belief that the billing error exists.

(h) A “response” is a writing that is responsive to an inquiry
and mailed to the cardholder’s address last known to the card
issuer.

(i) A “timely response” is a response that is mailed within two
complete billing cycles, but in no event later than 90 days, after
the card issuer receives an inquiry.

(j) A “billing error” means an error by omission or commission
in (1) posting any debit or credit, or (2) in computation or similar
error of an accounting nature contained in a statement given to the
cardholder by the card issuer. A “billing error” does not mean any
dispute with respect to value, quality, or quantity of goods, services,
or other benefit obtained through use of a credit card.

(k) “Adequate notice” means a printed notice to a cardholder
that sets forth the pertinent facts clearly and conspicuously so that
a person against whom it is to operate could reasonably be expected
to have noticed it and understood its meaning.

(l) “Secured credit card” means any credit card issued under an
agreement or other instrument that pledges, hypothecates, or places
a lien on real property or money or other personal property to
secure the cardholder’s obligations to the card issuer.

(m) “Student credit card” means any credit card that is provided
to a student at a public or private college or university and is
provided to that student solely based on his or her enrollment in a
public or private university, or is provided to a student who would
not otherwise qualify for that credit card on the basis of his or her
income. A “student credit card” does not include a credit card
issued to a student who has a cocardholder or cosigner who would
otherwise qualify for a credit card other than a student credit card.

(n) “Retail motor fuel dispenser” means a device that dispenses
fuel that is used to power internal combustion engines, including
motor vehicle engines, that processes the sale of fuel through a
remote electronic payment system, and that is in a location where
an employee or other agent of the seller is not present.

(o) “Retail motor fuel payment island automated cashier” means
a remote electronic payment processing station that processes the
retail sale of fuel that is used to power internal combustion engines,
including motor vehicle engines, that is in a location where an
employee or other agent of the seller is not present, and that is
located in close proximity to a retail motor fuel dispenser.